Cheniere ready to start work on Sabine Pass expansion, urges feds to give full approval

Cheniere Energy is ready to start construction on an expansion of its Sabine Pass liquefied natural gas export terminal, but it can’t start work until federal regulators dismiss an environmental group’s request to intervene.

The Federal Energy Regulatory Commission in April cleared Cheniere to expand the terminal beyond the four trains already under construction in Louisiana, but the Sierra Club asked for a rehearing, delaying the project.

The Houston-based LNG company said its eager to start work on the project. It has locked in contracts for a fifth production unit with a French company and an English utility, which plans to use the natural gas it buys from Cheniere to heat 1.8 million homes in the United Kingdom, CEO Charif Souki wrote in a letter this week to FERC.

Cheniere is nearly finished piecing together financing for the project and is poised to give a construction company the green light to start work, but it can’t make a final investment decision until FERC rules on the Sierra Club’s requests.

It urged FERC to act soon to deny a rehearing, arguing that the group is raising the same concerns it made regarding the company’s Corpus Christi LNG export terminal, when federal regulators dismissed the group’s request for additional reviews.

The Sierra Club has argued that the terminal will contribute to air pollution and lead to a swell in natural gas production, in turn causing an increase in greenhouse gas emissions and an uptick in gas prices.

“In short, Sierra Club’s members have vital economic, aesthetic, spiritual, personal, and
professional interests in the project,” the club wrote in a letter to FERC requesting intervention.

Souki noted that the project has enjoyed widespread support from local, state and federal politicians, as well as local residents, he wrote.

“At an estimated $20 billion investment, the Sabine Pass Liquefaction Project is one of the largest development projects ever proposed in the state of Louisiana,” Souki wrote.

Cheniere’s expansion calls for adding two additional LNG production facilities, called trains, to the four-train Sabine Pass terminal now under construciton. Adding a fifth and sixth train would boost the terminal’s authorized processing capacity by half, from 2.76 billion cubic feet per day to 4.14 billion cubic feet per day, according to filings with the Federal Energy Regulatory Commission.

The first phase of the terminal is nearing completion, pushing Cheniere closer to becoming the first large-scale plant in decades to ship LNG from the continental United States. The first train is expected to begin producing LNG this year with shipments going out by early next year.